Scatec Solar AS and Norfund AS of Norway secured $23.7 million for a Rwandan photovoltaic plant in East Africa’s first financing deal for a solar project.
The partners, along with Dutch company Gigawatt Global Cooperatief UA, will develop an 8.5-megawatt solar park in Agahozo-Shalom Youth Village, Scatec said on Tuesdayin a statement.Construction at the orphan community near Kigali will start immediately and be completed by the summer, the developer said. “This first-ever utility-scale solar field in Rwanda, and all of East Africa, represents the future of energy for developing countries and for island nations,” Gigawatt Global President Yosef Abramowitz said separately. “Environmentally friendly solar energy is far less expensive than diesel.”The plant will provide power to the electricity grid to help Rwanda with shortages and to expand coverage. The nation, now with about 110 megawatts of power capacity, plans to increase the figure fivefold by 2017 to reach half of the population. The project is one of the largest planned in the region, where megawatt-scale solar parks only operate in Botswana and France’s Reunion island, Bloomberg New Energy Finance data show.
Only South Africa and Mauritania operate larger photovoltaic projects on the continent. Norfund, a state fund for investment in developing nations, and Scatec each hold 40 percent of the new project’s equity and Gigawatt Global owns the rest. Senior debt is provided by Dutch development bank FMO and the Emerging Africa Infrastructure Fund. Norfund also provided a mezzanine loan.
Of the $23.7 million project cost, senior debt covers 75 percent, equity 15 percent and the mezzanine loan 10 percent, Sven Rost, a spokesman for Scatec, said by e-mail. The loan duration is 15 years and pricing details are confidential.
Scatec, which completed the continent’s largest solar park in South Africa in September, will design, build and operate the Rwandan facility. The plant benefits from a 25-year power purchase agreement with the Rwanda Energy, Water and Sanitation Authority, signed last July. Gigawatt Global began the project helped by grants from the U.S.-led Energy and Environment Partnership